AIOU SOLVED ASSIGNMENT 1 CODE 456 SPRING 2017 TAXATION

Q.1 Understanding the legal terms in taxation provides a way forward for determining the tax liability of a person. Keeping this in view, define the following terms with reference to Income Tax Ordinance 2001: (20)
a) Depreciable Asset Answer: Any type of asset that is eligible for depreciation treatment. Depreciable property can include vehicles, real estate, computers and office equipment, machinery and heavy equipment, and several other categories of assets. Depreciable property items tend to be long-term assets.

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AIOU SOLVED ASSIGNMENT 1 CODE 456 SPRING 2017 FOR COMMERCE STUDENTS.

b) Taxable Income Answer: Taxable income is the amount of income used to calculate an individual’s or a company’s income tax due. Taxable income is generally described as gross income or adjusted gross income minus any deductions or exemptions allowed in that tax year.
c) Turnover Answer: He amount of money taken by a business in a particular period. d) Industrial Undertaking Answer: According to section 3
(d) of the Industries (Development and Regulation) Act, 1951, ‘industrial undertaking’ means any undertaking pertaining to a scheduled industry carried on in one or more factories by any person or authority including government.
e) Public Company Answer: A company whose shares are traded freely on a stock exchange.
f) Tax Period Answer: A “tax year” is an annual accounting period for keeping records and reporting income and expenses. An annual accounting period does not include a short tax year. The tax years you can use are: Calendar year – 12 consecutive months beginning January 1 and ending December 31
g) Intangible Answer: Not tangible; incapable being perceived by the sense of touch, as incorporeal or immaterial things: impalpable.

i) Accumulated Profit Answer: Accumulated earnings is the sum of a company’s profits, after dividend payments, since the company’s inception. It can also be called retained earnings, earned surplus, or retained capital.